by a railroad in its own favor as a carrier. Thus in a proceed. ing against the Delaware, Lackawanna & Western Railroad Company, 3 Int. Com. Rep. 302, and 4 I. C. C. R. 296, supra, it appeared that the railroad company kept no separate account between itself as a carrier and itself as a shipper of coal, so that there was no means of determining whether it carried for reduced rates as a carrier, or sustained a loss as a dealer. The commission in that case ruled that it had no power to order such an account to be kept. It could however determine whether the rate charged to the complainant was a reasonable one, and in determining that issue it could determine the price at which the railroad company sold its coal, and the extent of its own profits upon coal marketed compared with the rates charged other dealers for transportation, or whether it made any profit at all, could be inquired into by any tribunal authorized to pass upon the reasonableness of rates. The commission said in the former case, that even if the carrier kept a separate account showing what it charged itself for transportation, and even were such a separate account required, it would not be a safe guide in determining whether the carrier did or did not use its power as a carrier oppressively. See also case in 8 I. C. C. R. 630, another coal case, involving the rates from Myrick, Missouri, and from Rich Hill, the latter being owned by the Missouri Pacific Company. The court held that the only remedy available to the independent operator was to secure a reasonable rate, as the carrier could so adjust its rates that the moving of the coal could be conducted at a loss, the profit being derived from the carriage, and in that event every mine operating must operate at a loss.

In 7 I. C. C. R. 33, the railroad company owned the entire stock of a development company, which had been organized for the purpose of holding certain lands of the railroad company, and caused grain to be purchased in the name of the development company and transported over the lines of the railroad company and sold upon the market. The commission said that even assuming that the development company was an independent entity, and that the nominal freight charges were actually paid by it, still it was merely a tool in the hands of the railroad company and the act accomplished was the act of that company. There was no fixed rate, and the rate actually received was less than was, or would have been, charged any other person for the

same service under the same conditions. Here it was said that this was a clear violation of section 2. The commission in this case distinguished the coal cases above cited, saying that in those cases there was a permanent condition which must be met, while this was an unlawful practice which must be stopped.

In the Chesapeake & Ohio Railroad Company case, supra, there was a contract between the railroad company and another railroad for the sale of coal to be transferred over its line at a price less than the aggregate cost of the expense items and its own published freight rates. The court held that this transaction was not a violation of section 2, unless the transaction was a mere device to cover an intentional giving of a less rate for carriage to some than to others, there being no legal ground for assuming that the loss was sustained by it as a carrier rather than as a dealer, and also that if the carrier did not credit on its books its freight accounts with its published rate and did not charge the loss to an account kept with the article dealt in, there would seem to be an apparent violation of the 2nd and 6th sections of the act; but at most only a technical violation, as it had a right to suffer a loss as a dealer. The court could not find any authority for saying that the loss under such a contract must necessarily be treated as a loss on carriage, there being no evidence in the case affecting the good faith of the contract, and therefore nothing whereon to base an inference that the transaction was a device to evade the law. See "commodity clause" in amendment of 1906, § 157, supra.

§ 215 (162). Discrimination in storage of goods, etc.-Another form of discrimination condemned by the commission was presented in the complaint of the American Warehousemen's Association, 7 I. C. C. R. 556, which set forth that a large number of railroads unjustly discriminated in offering free storage of freight in various ways to some shippers and not to others, in failing to collect demurrage charges on cars detained by favored shippers, by storing for some concerns large quantities of freight and making delivery thereof in small lots to purchasers, and by assuming expenses of unloading, loading and cartage for some shippers and not for others. A large volume of testimony was taken in different parts of the country. The commission ruled that the system prevailing was open to grave abuses, and that the

allowance of such privileges as storage and the like was clearly forbidden by section 2 of the statute. The effect of allowing special facilities for storage was to provide a favored shipper with branch business houses in large cities. The investigation resulted in a general order requiring carriers to state in their tariffs, what free storage was granted and the terms and conditions under which it would be granted. The commission said that as this procedure had been recommended by the supreme court in the Grand Haven Free Cartage case, it was all the more applicable in the case of storage, which was expressly mentioned in the act. As to right of carrier to contract for storage of through grain in elevators at terminals in transit, see 10 I. C. C. R. 309.

§ 216 (163). Stoppage in transit privileges.-The privilege of milling in transit, that is of stopping in transit, for the purpose of grinding grain into flour or compressing cotton, or sawing logs into lumber, at some point in transit, and then shipping the manufactured or compressed product forward at the through rate, has been discussed in several cases by the commission. See infra, § 234. In 8 I. C. C. R. 121, the commission commended the practice in a case of cotton shipment, saying that it benefited both the railroad company and the producer and tended to place non-competitive points upon equality with more distant competitive localities from which lower rates were in force. Such privileges may be granted or withheld by the carrier.

The receiving of cotton from a shipper and having it compressed at a station en route and reshipping to eastern points at the rate equal to the published through rate is not an unlawful discrimination under section 2, when all parties are entitled to the same privilege. Cowen v. Bond, 39 Fed. 54 (So. Dist. of Miss.). It is immaterial in such case, that the arrangements are made to induce buyers to believe that the cotton was actually raised in different localities than where it was in fact raised, as the deception could not be imputed to the railroad company. But when the privilege is extended, it must be extended to all in the same conditions and "similarly situated." See infra, section 3.

The mere fact of the payment of a local rate to the manufacturing or compressing point is not material, if there was from

the first an agreement that the property should be entitled to the privilege, and it goes forward from the compressing or manufacturing point upon a through bill from the point of origin to the destination.

Another application of the milling in transit privilege was illustrated in 10 I. C. C. R. 193, in the making of a through rate on lumber with allowance of a proportion of a rate for cost of moving the lumber by a "tap line" from the forest to the mill. The commisson ruled that this allowance could only be made to another common carrier, and could not be granted to a shipper as compensation for cost of moving the lumber to the mill.

In Laurel Cotton Mills v. Gulf & S. I. Railroad Co., the supreme court of Mississippi in June, 1904, 37 So. Rep. 134, sustained a right of recovery, that is, it held a petition not demurable under a contract by a railroad with a manufacturer about to erect a cotton mill to give it a milling in transit rate not exceeding certain rates to certain competitive points. The court adopted and followed the opinion of the commission in the lumber tap line case above cited as to the legality of a milling in transit rate.

§ 217 (164). Unjust discrimination through abuse of stoppage in transit privileges.-While the commission has recognized and approved the allowance of through rates in cases of stoppage in transit for purpose of milling wheat into flour and compressing cotton, so as to facilitate the movement of the great staples of the country to market, this privilege has been sought to be applied to cases where there was no manufacture or compressing, but where the effort was to secure a through rate when property was stored for a time at an intermediate point on the through line. Thus shipments of grain were carried to Kansas City from points west thereof at local rates, and afterwards shipped and rebilled from Kansas City to Chicago at the balance of the established through rate from the original point of shipment to Chicago. There was no agreement for the through carriage between the shipper and the carrier at the original point of shipment, but the practice was to allow the consignee or other owner of grain at Kansas City to ship from Kansas City to Chicago and other points at the balance of the through rate

upon presentation of the paid expense bill to Kansas City. The commission ruled that such shipment and re-shipment did not constitute a through shipment from the point of origin to the final point of destination, and that the grain so shipped and reshipped was not entitled to the benefit of the through rate in force and that the shipment from the point of origin to Kansas City was local, resulting in the grain becoming Kansas City grain, and the fact that it had come from a point further west was no reason for applying on shipments of such grain from Kansas City any less or different rate than was in force from Kansas City. The commission ruled that an indispensable element in every through shipment was the same-a contract for such through service, and an agreement between the parties at the inception of the carriage from the point of shipment to the destination at the through rate. 7 I. C. C. R. 240. The same was made in the case of a cattle shipment. 3 I. C. C. R. 450, and 2 Int. Com. Rep. 721.

Any devices therefore for securing a through rate, where the shipment is not in fact a through shipment, and is specifically allowed the milling in transit privilege on facts not justifying the same, would be an unlawful discrimination and violative of this section.

§ 218 (165). Unjust discrimination in passenger service.Unjust discrimination is prohibited in the transportation of passengers, as well as property. This section however does not prohibit separate cars for the white and colored races, provided cars and accommodations equal in all respects are furnished to both and the same care and protection of passengers observed. 1 I. C. C. R. 428, 1 Int. Com. Rep. 719. See also 1 I. C. C. R. 208, 1 Int. Com. Rep. 611.

When a railroad company makes a reduction from regular passenger fares which are not found unreasonable, it may lawfully require that a person desiring to avail himself of such reduction shall purchase a ticket and that all persons not holding such reduced rate ticket shall pay the reasonable ordinary fare. 10 I. C. C. R. 217. For alleged discrimination in parlor car rates as between through and local passengers not sustained, see 10 I. C. C. R. 221.

The regulation published on regular tariff sheets that the